Underwater Mortgages Not a Problem as Job Hunters Relocate for Employment Purposes

Underwater Mortgages Not a Problem as Job Hunters Relocate for Employment Purposes

A study released last week by the Federal Reserve Bank of Cleveland shows that jobless homeowners whose mortgages are underwater do not have any issue with relocating to find a new job.

According to the study, the recession era saw the prevalence of what it calls the “locked-in effect”, wherein underwater borrowers, or those who owe more on their mortgages than the value of the property, refuse to relocate for employment purposes. Cleveland Fed economist Yuliya Demyanyk posited in the study that unemployed homeowners with negative equity would, if a job is available in another part of the country, likely “accept the job because the benefits of earning a higher income outweigh the costs associated with selling an underwater home.”

Demyanyk added that underwater homeowners are actually more likely to take the plunge and move to another region than homeowners with positive equity, an interesting observation considering the potential loss of money when selling a home with negative equity.

The study involved the gathering of credit report data to find out whether homeowners, particularly those who are underwater on their mortgages, have relocated or not. The Cleveland Fed also worked with a theoretical model to simulate how homeowners would act in specific situations.

These situations involved deciding whether homeowners would be willing to move elsewhere if it means gainful employment and a steady paycheck, and if such benefits outweigh the possibility of losing money by selling an underwater piece of real estate.

Sifteo Cubes go next-generation, square gaming gets more portable (update)

Sifteo Cubes go next-generation, square gaming gets more portable (update)

It's hard to believe, but Sifteo's interactive gaming Cubes first went on sale just over a year ago .

. Fast forward to the present, and the company has unveiled version two of the MIT-born blocks. If you'll recall, the 1.7-inch squares let you play interactive table-top games, each featuring a 1.5-inch LCD screen, motion sensing and wireless connectivity. With this next-gen variant, Sifteo's improved the graphics, added capacitive touch to the screen (the original acted like a physical button) and doubled the amount of Cubes that can interact at once to 12. The V2 Cubes also come packed with a dedicated, AAA-powered, wireless base station / speaker that stores your titles, sparing the need for a computer to play as was the case with the originals -- an onboard USB port allows downloaded files to be transferred from your computers. Developers looking to create content for the device will also pleased to know that Sifteo's releasing its next SDK on October 1st.

Ready for some tangibly-cute Cube gameplay? Pre-orders begin today at Sifteo's website, priced at $130 for 3 Cubes with a base station and five games, and $30 for each additional cube. They're set to ship in November, so in the meantime you'll find details in the video demo and press release after the break.

Gallery: Sifteo Cubes next generation | 4 Photos

Consumer Borrowing in U.S. Increases by $10.4 Billion in July

Consumer Borrowing in U.S. Increases by $10.4 Billion in July

New statistics from the Federal Reserve released yesterday indicates that Americans used their credit cards less in July 2013, while consumer borrowing made another $10 billion-plus gain that month.

According to the Fed’s analysis, American consumers spent less on credit card purchases for the second straight month, while redirecting their expenditures to student or automobile loan payments.

The statistics in general may be indicative of a muted economic growth, as well as more conservative spending patterns for Americans in general.

All told, credit card borrowing dropped by $1.8 billion to about $850 billion in July – this came after a $3.7 billion downtick in credit card debt in June. As for consumer borrowing, that increased by $10.4 billion in July, a mild slowdown from the $11.9 billion gain in June.

Borrowing is now at an all-time high of $2.85 billion following July’s uptick, while auto and student loan borrowing increased $12.3 billion in July to $2 trillion, also a record.

Compared to last year, auto and student loan borrowing is up 8.1 percent, and has increased in all but one months since May 2010. Credit card debt, on the other hand, is 17 percent below its all-time high in July 2008, back when the global economic recession was in full swing.

As average wages have not improved much and neither have employment prospects, the Fed’s statistics suggest consumers are more conservative when it comes to using “plastic”, while more eager to return to school or purchase a new automobile, hence taking advantage of the improved economic conditions.

Obama Still Searching For Significantly Lower Jobless Rate

Obama Still Searching For Significantly Lower Jobless Rate

If President Obama could send Navy SEAL commandos into action to find, say, a six percent jobless rate the way they cornered Osama bin Laden, Democrats might feel a lot more confidence about the 2012 election landscape than they do.

But, alas, even Navy SEALs have limits.

The Labor Department reported Friday what should have been the unabashed good news that the economy had an unexpectedly large net gain of 244,000 jobs in April.

But it wasn't a case of unalloyed joy for Democrats since the jobless rate rose to 9 percent in April from 8.8 percent in March. That could be because more people went back into the job market looking for jobs in April as the weather improved and employers hired more.

Economists can explain all they want that the payroll numbers and jobless rate are derived from two different surveys that sometimes diverge.

But Democrats can expect that Republicans will work to keep them on the defensive so long as the jobless rate remains significantly above the 8 percent level.

That's what White House economists forecast back in 2009 would likely be the top level with the passage of the economic stimulus of the same year.

Worth noting is how static the statements from the White House and House Republicans have been in the last few months with each new employment report.

Since the start of the year, Austan Goolsbee, chair of the White House Council of Economic Advisers, has pointed to the payroll tax cut and other tax reductions meant to stimulate hiring for the job growth. And he did so again.

Seeking to keep expectations low, he has also warned that the jobs numbers numbers are volatile month to month so we shouldn't read too much into them.

The overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.

And Speaker John Boehner (R-Ohio) continued to blame Democratic Party policies for any weakness in the jobs data that remains, though it appeared he shifted subtly from accusing Democrats of having "job-killing" policies to saying they were creating "uncertainty."

While any improvement is welcome news, job growth in America is still nowhere close to what it should be. Our economy continues to suffer from the uncertainty being caused for private-sector job creators by the Democrats who run Washington. Over the past month, rather than joining Republicans in focusing on policies that promote long-term economic growth to help balance the federal budget, the Democrats who control Washington have indicated they are planning to increase taxes and allow the government's spending binge to continue. The policies proposed by the White House and Senate Democrats are causing renewed uncertainty for private-sector job creators, crowding out private investment and punishing small businesses and entrepreneurs who are willing to invest, expand, and take risks to create more American jobs.

Would Americans Be Willing To Pay A Mileage Tax?

Would Americans Be Willing To Pay A Mileage Tax?

Interstate 630 in Little Rock, Ark., March 10, 2011.

Interstate 630 in Little Rock, Ark., March 10, 2011.

Danny Johnston/AP hide caption

toggle caption Danny Johnston/AP

Would Americans be willing to pay a tax based on the mileage they drive with the money raised going to fix the nation's highways and bridges?

Maybe. Then again, anyone who knows how Americans feel about their cars and and how important getting out on the open road is to so many of us can be excused for having doubts.

Still, the federal gas tax isn't raising enough money. First, the 18.4 cents a gallon tax hasn't been raised since 1993. That isn't a typo.

Secondly, with ever more Americans driving more fuel efficient cars, the gas tax is just plain inadequate to the nation's infrastructure needs.

Thus someone in the Obama Administration is running up the flag pole the idea of a tax that would be based on the mileage you drive. But the administration officially wants you to know that it's just an idea, as vaporous as gas fumes. Nothing to worry about. Not yet at least.

The White House, however, said the bill is only an early draftthat was not formally circulated within the administration.

"This is not an administration proposal," White House spokeswoman Jennifer Psaki said. "This is not a bill supported by the administration. This was an early working draft proposal that was never formally circulated within the administration, does not taken into account the advice of the president's senior advisers, economic team or Cabinet officials, and does not represent the views of the president."

Mortgage Rates: Atlanta Fed President Predicts Interest Rate Hike to Take Place at Least Six Months After End of QE3

Mortgage Rates: Atlanta Fed President Predicts Interest Rate Hike to Take Place at Least Six Months After End of QE3

According to a leading U.S. Federal Reserve official, the central bank may likely increase short-term interest rates about six months after the end of its bond-buying economic stimulus.

Federal Reserve Bank of Atlanta President Dennis P. Lockhart said on Tuesday that he thinks Fed Chair Janet L. Yellen’s recent comments represent the earliest time the Fed would start increasing benchmark rates from near-zero levels. Last week, Yellen said at a press conference that it may be a “considerable time” before the central bank raises rates, though she added that this could mean six months after the end of the so-called “QE3” (third round of quantitative easing) stimulus. This had resulted in volatile stock market gyrations, but according to Lockhart, it may be “longer than that” before the Fed increases overnight interest rates, which have been at near-zero levels since the latter part of 2008.

The centrist Lockhart, however, was quoted as saying that his statements reflect his personal standpoint, and not that of the central bank. Lockhart does not have a vote this year on the Federal Open Market Committee, but has been quite participative in the Fed’s meetings, with his comments showing some congruence with those of the Fed’s top movers and shakers.

Mortgage interest rates have been at near-zero for over five years in an effort to stimulate the U.S.’ then-moribund economy, but recent job market statistics have spurred the Fed on to start cutting back on its bond purchases. Previously made to the tune of $85 billion per month since September 2012, the Fed started dialing down its purchases by $10 billion per month, with the current monthly pace of stimulus now at $55 billion.

Signeo reveals 'Soul by Ludacris' headphone series at CES

Signeo reveals 'Soul by Ludacris' headphone series at CES

Here's an idea: start a headphone company, and then consult any 'ole musician for sponsorship.

company, and then consult any 'ole musician for sponsorship. It's bound to work out well for you. HP has locked arms with Dr. Dre(and The Biebs!), Sleek Audio has done likewise with 50 Cent, Harman AKG has teamed with Quincy Jones, and now, Signeo is looking to Ludacris for a boost in the marketing department. Here at CES, the aforesaid outfit has just launched the cans you see above, aptly titled Soul by Ludacris. As you'd expect, they look mildly similar to the Beats headphone range that has seemingly taken the world by storm, and according to the release after the break, Luda was tightly involved in the construction of them. The Soul brand is debuting with five models in the line: the SL300 noise-cancelling headphones, on-ear SL150 / SL100 models and the SE99 / SE48 earbuds. The whole crew is tweaked to emit fairly intense bass ("without sacrificing the clarity of mids and highs," mind you), and while no pricing details are being shared just yet, we are told that you can find your own Soul when they hit shelves in "early 2011." One more look and the full release are after the break.

Show full PR text

Signeo USA Officially Unveils SOUL by Ludacris®

Company to Launch Full Suite of High Performance Audio Line with World Renowned Artist Ludacris at the 2011 Consumer Electronics Show

January 5, 2011 – Signeo USA, a global leader in pro and consumer audio manufacturing, announces the worldwide launch of a superior new line of personal audio products - SOUL by Ludacris®. In a highly collaborative effort with the Grammy winning and globally renowned artist Chris "Ludacris" Bridges, the SOUL® brand kicks off with an initial 5-model line-up of high definition headphones that offer the elite sound caliber of a professional headphone with a distinct flair for self expression and style. Driven by his famously artistic vision, and supported by an award-winning design team with resume credits spanning from luxury automotive to world-class electronics, the line dons a sleek form factor and presents an array of eye-catching colors and uniquely designed styles.

"It was important to our team to create a collection of audio concepts that not only delivers a powerful and precise listening experience, but also embodies the kind of style people look for in a nice pair of sunglasses or even a sports car", said Bob Bonefant, Executive Director of Signeo USA. "Ludacris is a perfect partner for us as he is the consummate individualist and has such a talent for infusing a distinct style into everything he does."

The SOUL by Ludacris line debuts with the High Definition Professional SL300 Powered Noise Cancelling headphone, High Definition On-Ear models SL150 and SL100, and the SE99 and SE49 High Definition In-Ear headphones. The entire line contains professionally voiced sound technology with advanced circuitry and drivers designed by a team of engineers who have developed some of the most notable acoustic breakthroughs in the audio industry. Elements such as world-class noise cancellation technology and ultra precise audio mix balancing deliver deep bass without sacrificing clarity of mids and highs to provide a listening experience fit for a wide audience that reaches the business traveler or casual music lover to the pro musician or audiophile.

Signeo USA Executive Director Len Davi commented," Delivering an impactful sound experience is an art form. Music is a passionate expression, and when you hear a great performance it's a very powerful thing. The SOUL name and concept is founded on the idea that you should be able to experience that feeling with each listen."

The SOUL by Ludacris® product line will be exclusively distributed by Ingram Micro, Inc. (NYSE: IM) through its Consumer Electronics Division. The new line is scheduled to hit retail shelves nationwide in early 2011.

For More Information, please visit www.SOULbyLudacris.com

About SOUL by Ludacris®
Expression, Passion and Superior Sound are at the core of the SOUL by Ludacris ®experience. Here to prove that style and sound quality can coexist, the SOUL line offers an array of personal audio products that masterfully balance elements such as world-class noise cancellation technology with superior sound quality, allowing you experience the full range of your music. Pair that with an award winning design team and the expressive vision of world renowned artist Ludacris, and you get the first headphone that effectively merges style with professional acoustics.

Possible Sea Change May Happen in Mortgage Lending in 2014, Federal Savings Bank Reports

Possible Sea Change May Happen in Mortgage Lending in 2014, Federal Savings Bank Reports

Though, not a 2014 prospectus in the truest sense, a recent report from the Federal Savings Bank’s talked about what the coming year may bring for consumers vis-à-vis the broader mortgage lending market.

In terms of mortgage rates, the Federal Savings Bank predicted that interest rates may be higher in 2014, especially if the Federal Reserve starts its so-called “taper” of its bond-buying stimulus by early 2014. If it does so, interest rates may scrape the 5 percent threshold, though the Federal Savings Bank believes that higher rates may not be as detrimental to the housing market as one may think.

Quantitative easing (colloquially known as “QE”), after all, is an ersatz way of keeping mortgage rates at historical lows, while higher mortgage rates could result in more long-term upside by way of steadier housing growth.

The Federal Savings Bank also postulated on how recent lending reforms may manifest on the housing market next year. Many of these reforms were instituted pursuant to avoid another housing bubble, and the Federal Savings Bank quoted the Home Buying Institute in saying that home buyers may need to furnish additional documentation to prove their capability to repay their mortgages.

Finally, the congruent increase in pricing and in housing inventory could mean more homes may be placed on the market. This would be a win-win situation for first-time home buyers and sellers alike, as it would mean more chances for home buyers to purchase their new home, and more homes for sellers to offer to their clients.

Mortgage Rates: Fed Elects to Begin Tapering, Bond Purchases to Go Down to $75 Billion Per Month in January 2014

Mortgage Rates: Fed Elects to Begin Tapering, Bond Purchases to Go Down to $75 Billion Per Month in January 2014

On Wednesday, the Federal Reserve decided to start what has been informally dubbed as “tapering”, or the gradual reduction of its ongoing economic stimulus initiative.

On Wednesday, the Federal Reserve decided to start what has been informally dubbed as “tapering”, or the gradual reduction of its ongoing economic stimulus initiative. Currently being made to the tune of $85 billion per month, the Fed will cut back its bond purchases to $75 billion per month, starting in January 2014. The tapering will cover $5 billion decreases each in monthly mortgage-backed security and monthly Treasury purchases.

According to the Fed’s official statement, its Open Market Committee decided to start its modest tapering “in light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions.”

Despite the imminent tapering, it still may be a while before the Fed ceases stimulus entirely. At the present, the initiative has become so overarching that it is projected to increase Fed assets to $4 trillion as of this week. Even with the tapering due to begin soon, the Fed remained steadfast on its commitment to keep short-term interest rates at an “exceptionally low” level, contingent on the unemployment rate moving below the 6.5 percent threshold, and/or the inflation rate increasing to 2.5 percent per year.

Speaking at a press conference following the Fed’s meeting, Chairman Ben S. Bernanke said that the Fed’s decision to taper is not tantamount to the central bank backing off on its commitment to economic support. “Nothing we did today was intended to reduce accommodation,” said Bernanke in defense of the taper. Majority of Fed officials expect interest rates to only go up in 2015, even as it is forecasted that inflation may still be below the 2.5 percent goal as of that time.

Talking about inflation, Bernanke told reporters that the Fed has “enhanced” its forward guidance pursuant to maintaining extremely low interest rates. “The committee is determined to avoid inflation that is too low, as well as inflation that is too high.” Following the Fed meeting, the stock market reacted by rallying, as the Dow gained about 200 points after news of the January taper became official.

The fallout of the announcement may not manifest itself much on consumers for the immediate foreseeable future, as interest rates may remain at historical low levels for some time. This means consumers could take advantage of competitive rates on home loans, auto loans or business loans, though these rates may not be at the record-low levels posted between late 2012 and spring 2013. “Taper talk,” as pundits call it, caused interest rates, particularly those for mortgages, to shoot up starting in May, but particularly in the summer months.

The move to taper stimulus was dissented by only one Fed official, the Boston Federal Reserve’s Eric S. Rosengren. Rosengren posited that unemployment rates were still too high and inflation rates too low to justify a tapering of stimulus. Otherwise, it was a near-unanimous decision, and one that may mark Bernanke’s last major decision as Fed chair before his term expires on January 31. This would leave the balance of the exit strategy in the hands of Bernanke’s purported replacement, Janet L. Yellen, who is expected to be confirmed as Bernanke’s replacement later this week.

Fannie Mae Predicts Increase in Mortgage Rates, Discontinuation of Stimulus Next Year

Fannie Mae Predicts Increase in Mortgage Rates, Discontinuation of Stimulus Next Year

Mortgage buyer Fannie Mae had some very fascinating insights in its October Economic Forecast, as the monthly prospectus hinted at what could be an increase in mortgage interest rates and the end of the so-called “QE3” economic stimulus by next year.

Be that as it may, the end of the U.S. government shutdown made several points on the forecast moot, but Fannie Mae was scarily accurate when it came to predicting how long the impasse would last – two to three weeks.

The report, penned by Douglas Duncan, Orawin T. Velz and Brian Hughes-Cromwick, included some revisions in the mortgage buyer’s economic growth estimates for the December 2013 ending quarter, as this metric is now at 2 percent, down from 2.5 percent. This would push full year growth down from 2 percent on the last prospectus to 1.9 percent for the October forecast.

The Federal Reserve’s decision to push forward with its “QE3” economic stimulus, which currently entails $85 billion in bond purchases, has pushed long-term mortgage rates down, and has served as a partial failsafe for what could have been a deleterious effect caused by a protracted shutdown and the possibility of the U.S. government defaulting.

Still, Fannie Mae believes that it may not be enough to hinder some short-term negative possibilities. The agency’s economists now forecast a start of stimulus tapering in 2014, leading to an end to the initiative by second half 2014. Fannie Mae does not expect funds rates to increase until the September 2015 frame, which is when unemployment should go under the Fed’s current sweet spot of 6.5 percent.

In terms of the broader housing market, Duncan, Velz and Hughes-Cromwick believe that mortgage rates will make a slow, but steady climb throughout 2014, averaging about 4.4 percent in the December 2012 quarter and 5 percent next year. Despite the rise in rates, this is still 20 to 30 basis points lower than what the economists predicted on the September prospectus.

Why America will never get rid of Daylight Saving Time

Why America will never get rid of Daylight Saving Time

The life of an economist is often frustrating.

The life of an economist is often frustrating. It’s our job to figure out the most efficient, welfare-enhancing solutions to economic problems, only to see the 2nd or even 20th best solution become policy. There are special interests and well-intentioned, but misinformed, policy makers who steer us toward inefficiency—and the most vulnerable suffer. I’m not talking about trade tariffs, a high national minimum wage, or decaying infrastructure, I am talking about Daylight Saving Time (DST).

This Sunday (March 13), North Americans (who don’t live in non-Navajo Arizona, Saskatchewan, Quintana Roo, Sonora, Hawaii, or some Amish communities) will start DST and set their clocks forward one hour. Between then and April 3dozens of more countries (mostly rich ones) will do the same.

Prudent Germans were the first to implement the policy in 1916 hoping to save energy. The US followed in 1918 during a fury of war-time rationing. Even then it was controversial. Farmers (who in a cruel ironic twist end up being blamed for the practice) actively lobbied against it. They must get up with the sun and their animals and found it disruptive they suddenly had to get to market an hour earlier. The retail industry was for it, vigorously lobbying against the farmers. But the political lure of offering people both more waking daylight and lower energy bills won out and many states adopted DST.

There is no economic justification for DST.

There is no economic justification for DST. The primary benefit is the alleged energy saving, but it turns out the evidence is, at best, mixed on whether DST saves energy after all. Extending Day Light Saving a month in 2005 barely saved any energy. Meanwhile, another study found that when Illinois adopted DST in 2006, any energy saving was more than canceled outby people using their air-conditioning for more hours.

And the costs are substantial. Changing time disrupts sleep, causing more heart attacks, strokes, traffic, on-the-jobaccidents (pdf), and lost productivity hours. The whole point of time zones is coordinating economic and social activities, but changing clocks causes confusion. The fact that different countries change their time on different days, and poorer countries don’t at all, makes international business and travel more difficult. The airlines estimate DST costs them $147 million dollarsa year.

So if there is little benefit and significant costs, why do we continue with this practice?

Polls suggest Americans don’t see much value in the semi-annual time changes. But any policy, good or bad, is very hard to get rid of once it’s in place. Time zone expert and author of Spring Forward the Annual Madness of Day Light Saving Time Michael Downing, reckons there are two main reasons we can’t get rid of DST: a romance we have with long summer evenings and special interests. The pain of early mornings next week are long forgotten when you enjoy a evening bbq in July.

The whole point of time zones is coordinating economic and social activities, but changing clocks causes confusion.

The powerful retail lobby, particularly recreation, bbq, and home and gardening remains invested in keeping DST. Longer nights mean people have more time to shop and go to baseball games (and use more gas—further cutting into the alleged energy savings). Downing says each year the convenience store lobby (a large supplier of gas) gives out gift bags to Congress to celebrate DST. He’s observed how every 20 years the federal government adds another month of DST—the last one in 2005, in part, because the sugar lobbywanted to extend trick or treating hours. And each time we extend DST, America becomes more out of sync with the rest of the world.

The anti-DST movement doesn’t have the organization to compete with the retail lobby. The American economy has changed since the early days of DST. Now, retailers wield more power than the traditional voice of opposition, farmers. Downing points out that by 2000 more Americans lived on golf courses than farms.

Technology could prompt a change as people live more virtually from their homes, which may weaken the retail lobby’s need to keep DST. Downing also thinks that as more people use their smartphones as clocks (which update time change automatically) and alarms, they’ll become less engaged with time changes. He speculates the new technology may change the time conversation.

Any policy, good or bad, is very hard to get rid of once it’s in place.

Right now ending DST falls to individual states. This creates a coordination failure that ensures DST is here to stay. The purpose of time is to facilitate economic and social activities through better coordination. But if your state is one of a handful to go off DST, you are further out of sync with your neighbors you do business with. Hawaii can get away with it because its already on its own time zone and near the equator. Arizona may have pulled it off, but being contrarian is core to its state-wide identity.

A few bold legislators in other states have triedend DST recently. Both Utahand Californiahave bills proposing its end. In 2013 Missouri tried to end Day Light Saving, contingent on 19 states doing the same—effectively folding Central time into Eastern time ( a wonderful ideain my opinion). But it never went anywhere. Utah Representative Mike McKell says of his DST ending efforts, “People really dislike changing,” he says.

Originally states and cities set their own DST schedules, but it created confusion and chaos. It took an act of Congress in 1966 for there to be a fixed 6-month period where states (it’s now 8 months) could choose to observe DST. It would take another act of Congress to break the cycle and get all states off this madness. But special interests and inertia keep us trapped in what economists call “a sub-optimal equilibrium.” According to Downing, “It’s ridiculous no one knows what time it is.”

To fix America’s infrastructure, you’ll need to save its local economies first

To fix America’s infrastructure, you’ll need to save its local economies first

If you make a habit of watching political chat shows, this scene is probably familiar: a famous economist (eyes closed, head shaking) making an impassioned plea for a federal revamp of America’s crumbling infrastructure.

If you make a habit of watching political chat shows, this scene is probably familiar: a famous economist (eyes closed, head shaking) making an impassioned plea for a federal revamp of America’s crumbling infrastructure. It’s hard to disagree—just look at the lead-tainted water in Flint, Michigan, and roads and bridges in poor repair all over the country. But if you want to understand why America isn’t spending on infrastructure, don’t start with Washington.

The majority of infrastructure projects are selected and financed at the state and local level. Even favorite target, New York’s LaGuardia Airport, belongs to the local port authority. In 2014, state and local governments spent $320 billion on transportation and water infrastructure, compared to just $96 billion by the US federal government. Even during the federal infrastructure glory days of the 1950s, state and local spending was several multiples largerthan federal spending. The gap widened in the 1980s when local governments ramped up their spending and federal spending stagnated.

A massive infrastructure upgrade from the federal government is great in theory. It gives people jobs and makes us safer and more productive in the future. But, in practice, high-level bureaucrats have a mixed record picking projects that provide economic value, with studies varying widely on how effective federal infrastructure spending actually is. Some studies estimatefederal infrastructure spending costs more than the benefit produced, while others claimit generates $2 of economic activity for every $1 spent. The differences often come down to measurement and how the money was used. Well-targeted federal infrastructure spending can pay off, but most projects aren’t always the free lunch they’re made out to be.

Leaving more spending to local governments isn’t necessarily a bad idea. They are arguably better informed about what projects are most pressing and potentially valuable. And while local politics are certainly prone to corruption (see George Washington bridge closing) and incompetence (Flint) local bureaucrats should have a better handle on area needs and are more accountable to voters.

But states haven’t increased spending on infrastructure in the last decade; it’s even declined slightly. Despite record low interest rates, debt issuance remains down since the recession, and most new debt is going to pay old obligations, according to Standard & Poor’s. Acquiring new debt often means higher taxes, and local governments would prefer to cut taxes rather than pay for long-term infrastructure projects.

The problem is worse in states and municipalities that have shrinking economies coupled with high fixed expenses like pensions and health care. That type of situation leaves places like upstate New York, Illinois, and Michigan little financial bandwidth to take on major projects that may require higher taxes.

Fixing roads and bridges is useful and can provide a temporary boost, but it’s not sufficient to revive these local economies or maintain infrastructure in the future. America is becoming more unequal, not just between high and low earners, but between struggling and thriving pockets of the economy. Ultimately, poor infrastructure isn’t the most pressing issue facing most American cities, it’s a lack of opportunity and quality education. Considering that, you can’t totally fault local politicians for promising lower taxes, to the detriment of infrastructure, when their constituents are living paycheck to paycheck. Struggling local economies are what sparked a race to the bottom with lower taxes and fewer services.

Ending this vicious cycle will require a significant role from the federal government, but it will take more than a new bridge project handpicked by a bureaucrat. A better use of federal money is to fix the rot at its source. How remains an open question. It could be tax breaks to help states put their pensions on firmer financial footing, as economists Josh Rauh and Robert Novy-Marx have proposed. Doing so would create more fiscal space to spend on other services. The federal government could also fund tax breaks and other incentives that strengthen the links between local universities (a source of innovation and talent) with businesses to spur start-ups and do more training for locals who’ve lost their jobs. By reviving local economies, you create a stable tax base to finance infrastructure. If we want more than short-term job creation, repairing America’s infrastructure problem will require ingenuity at the local level, where things broke down in the first place.

Why Hunting Down 'Authentic Ethnic Food' Is A Loaded Proposition

Why Hunting Down 'Authentic Ethnic Food' Is A Loaded Proposition

Japanese food was once derided, but it's now in the canon of haute cuisine, says author Krishnendu Ray .

. How we value a culture's cuisine in our society, he says, often reflects the status of those who cook it. Alex Green/Getty Images/Ikon Images hide caption

toggle caption Alex Green/Getty Images/Ikon Images

Japanese food was once derided, but it's now in the canon of haute cuisine, says author Krishnendu Ray. How we value a culture's cuisine in our society, he says, often reflects the status of those who cook it.

Alex Green/Getty Images/Ikon Images

Hunting down that obscure Vietnamese place that serves up bánh bao exactly like you'd find in Hanoi, or an Indian joint with dal just like the one you had on that trip to New Delhi, is a not uncommon pursuit in these food-obsessed days. But our culinary hunt for "authentic ethnic" food can be a double-edged sword, says Krishnendu Ray.

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Ray is the chair of the food studies program at New York University and author of the new book The Ethnic Restaurateur. When we seek authenticity from a star chef — say, Thomas Keller of the Michelin-starred restaurants The French Laundry and Per Se — what we really want is his signature, his individual creativity evinced through food, and we're willing to shell out big bucks to get it, Ray says.

But that's very different from the authenticity we demand from "ethnic" cuisine. In that case, Ray says, what we really want is a replica, "a true copy of our expectations" — some platonic ideal of what a dish should taste like. It's a definition of authenticity that can trap the immigrant cook in very narrow expectations.

"One of the big constraints, say, for Indian food or Chinese food is that, if it is expensive, it cannot be authentic," Ray says. Immigrant chefs "are trapped for that kind of demand for authenticity — cheap authenticity."

In his book, Ray explores the history of how immigrants in the food industry have shaped American notions of good taste — even as they themselves may occupy the lower echelons of the social hierarchy. How we value a culture's cuisine in our society, Ray says, often reflects the status of those who cook it.

In an increasingly multicultural society, the term "ethnic food," while still commonly used, is now starting to take on an offensive character, lumping all nonwhite people and their cuisines together in a category of "other."

Ethnic, Ray says, started being used to talk about food in the 1950s, partly as a relatively neutral way to acknowledge difference in a racially charged era. "Ethnic was useful back when America was a "white Anglo-Protestant-dominant culture," Ray says. But it always had the underlying connotation of "essential difference, of inferiority," he says, and is starting to feel outdated.

"Once Italians and Greeks and Mexicans and Indians and all these so-called ethnic groups acquired a cultural conscious and visibility in the public space, the word ethnic became inadequate," Ray tells me.

A chef cooks spaghetti at an Italian restaurant in Manhattan in 1953. In the late 19th and early 20th century, social workers and nutritionists cautioned that Italian food was too garlicky and spicy — which they said increased the craving for alcohol. It's now America's most popular "ethnic" cuisine.

A chef cooks spaghetti at an Italian restaurant in Manhattan in 1953. In the late 19th and early 20th century, social workers and nutritionists cautioned that Italian food was too garlicky and spicy — which they said increased the craving for alcohol. It's now America's most popular "ethnic" cuisine. Louis Goldman/FPG/Getty Images hide caption

toggle caption Louis Goldman/FPG/Getty Images

What's more, the concept of who is ethnic is fluid, as American history attests. The waves of Greek and Italian immigrants who came over beginning in the 1880s were once considered ethnics in the sense that they were separate from the dominant Anglo-American culture — working low-paying service jobs, often in the food industry, and living clustered in ghettos. As their lot improved over the decades and they moved up the economic — and social — ladder in America, Ray argues, appreciation for their food changed, too.

"Sometimes, our judgments of good taste has nothing to do with literal taste. It has to do with our notions and conceptions of a class of people," he says.

America has a long history of looking down upon the cuisine of its recent immigrants. For instance, from the 1880s until about the 1920s, Ray notes, social workers and nutritionists cautioned that Italian food was too garlicky and spicy — which they said increased the craving for alcohol. Today, Italian is the most popular ethnic cuisinein America. And it regularly appears among the most expensive and popular cuisines in the Zagat guide, which Ray calls upon as a pretty good window into the tastes of "middle brow" diners.

Each new large wave of immigration has remade American cuisine for the better, making it "more creative and rich," Rays says. He says we're currently going through another culinary transformation, driven by the easing of immigration rules in 1965 that resulted in a large influx of immigrants from Asia and Latin America.

And just as Italian food was once given the side-eye by nutritionists, Chinese food was also derided under the auspices of science. Witness the health scare that began in the 1960s over MSG, used as a flavor enhancer in Chinese cuisine and lots of other foods, too. As others have noted, the fears were flavored with xenophobia. Today, many eaters still avoid MSG — and many Chinese restaurants advertise "no MSG" — even though most scientists agree that fears about its negative health effects are unfounded.

Of course, learning to appreciate and accept immigrants' food takes time — it happens naturally as cultures learn to adapt to one another. But Ray argues that global forces are also at play.

Take Japanese food. In the late 19th and early 20th century, Ray says, "Japanese folks in Hawaii were always put on the defensive by schoolteachers, by nutritionists, [told] that they're basically eating food that is terrible, that's not good for them. And the children come home from school demanding good American food." Today, Japan is an economic superpower, and Japanese food is considered haute cuisine — often commanding top dollar from diners.

In America, there's long been a duality in how we view the cuisine of immigrants — as both suspect and exotic. In the late 19th and early 20th centuries, for example, rumors that Chinese immigrants used rat meat in their cooking were common. One New York Times story from 1883 pondered, " do the Chinese eat rats?" (Sadly, such tales persist.) Yet artists and other bohemians of the era sought outChinese restaurants, in part as a sign of their worldliness.

Today, seeking out ever more varied cuisine is still a mark of culinary sophistication. (It's a quest the famed writer Calvin Trillin parodied this week, with unintended consequences.) Finding that hole-in-the-wall joint with the best Filipino food in town is a foodie badge of honor.

"To be a connoisseur today you have to like some elements of non-Anglo ... food," Ray says. And despite his critiques of the search for "authentic ethnic" food, Ray stresses that our elevation of a multicultural approach to eating is a good thing. Opening our mouths to each others' foods can become a gateway to opening our minds to each others' cultures.

This story is part of a broader conversation we're having about where food, race and culture overlap. We want to hear from you. Let us know what questions are on your radars. You can reach me @mgodoyh— my co-conspirator is @katchow.

Philly Wants To Tax Soda To Raise Money For Schools

Philly Wants To Tax Soda To Raise Money For Schools

Khadija Sabir of Lovie Lee's Stars of Tomorrow preschool in Philadelphia attends a soda tax rally with three of her charges.

Khadija Sabir of Lovie Lee's Stars of Tomorrow preschool in Philadelphia attends a soda tax rally with three of her charges. The proposed tax promises to pay for universal pre-K, parks and recreation centers. Emma Lee/WHYY hide caption

toggle caption Emma Lee/WHYY

Khadija Sabir of Lovie Lee's Stars of Tomorrow preschool in Philadelphia attends a soda tax rally with three of her charges. The proposed tax promises to pay for universal pre-K, parks and recreation centers.

Emma Lee/WHYY

Philadelphia's new mayor wants to do something few American cities have done: pass a tax on soda and other sugary drinks.

So far, Berkeley, Calif., has been the only U.S. city to approvesuch a tax. That measure was aimed atreducing soda consumption (and the negative health effects that go along with drinking too much of it).

But in Philly, the tax isn't being promoted as a scheme to bring down the city's high rates of obesity or diabetes. Mayor Jim Kenney says he wants to use the revenue for projects that benefit residents in a city with a 26 percent poverty rate, the highest of America's largest cities. He argues soda companies make big money and often market their products to low-income people.

"What we're looking to do is to take some of that profit, to put it back into the neighborhoods that have been their biggest customers, to improve the lives and opportunities for the people who live there," he said at a rally promoting the tax last month.

Kenney claims a tax of 3 cents per ounce of soda, iced-tea and other sugary drinks — levied on beverage distributors — would generate more than $400 million over the next five years. The money would help fund a plan for universal pre-K and community schools that offer services like health care, as well as major renovations to parks, recreation centers and libraries.

So far, no one is complaining about Kenney's intentions, but Daniel Grace, who heads up the local Teamsters Union, says there has to be a better way to raise money. The union represents about 2,000 people who work in bottling plants and drive delivery trucks.

His argument against the tax boils down to this: It would likely drive up the price of soda (just as the Berkeley tax has done), which, in turn, will reduce the consumption of sugary drinks. "When the demand goes down, they don't need as many [workers] as they have today," he says.

The Teamsters Union has printed hundreds of "No soda tax" buttons and T-shirts and has been handing out leaflets.

And right after Kenney proposed the measure, the American Beverage Association — a national trade group that previously shelled out more than $9 million fighting Berkeley's soda tax — launched a social media campaign against the Philadelphia proposal and started running ads on local radio stations calling it a "grocery tax on the kind of drinks we buy for our family."

But while the association's campaigns target Philadelphia residents, the fate of the soda tax ultimately lies in the hands of the city council, which will make its final decision in June. Council president Darrell Clarke has not taken a side yet, but he's concerned the burden would fall hardest on those Kenney is trying to help: the poor. "It doesn't take a whole lot of analysis to determine where those sugary drinks are being sold," he says. "So the question is, is that fair?"

The Rev. Adan Mairena, who is part of a group supporting the tax, estimates 80 percent of his congregation in North Philadelphia lives below the poverty line and admits that some of them are worried about paying more for these drinks. He's urging skeptics to take the long view.

"If we pass this, it's going to provide more opportunities in the long run and it's going to make us a better people, a better community," he says.

At a supermarket just a few miles away, Maribel Alago says she disagrees. She points out the city raised property taxes last year. Plus, there's a $2-per-pack tax on cigarettes to help the cash-strapped school district.

"People cannot barely afford anything nowadays," Alago says. "Now they going to tax soda, too."

Mayor Kenney says if the city council doesn't approve the tax, there's no other way to pay for expanded pre-K or revamped rec centers. Plan B is going without those things.

Philly Wants To Tax Soda To Raise Money For Schools

Philly Wants To Tax Soda To Raise Money For Schools

Khadija Sabir of Lovie Lee's Stars of Tomorrow preschool in Philadelphia attends a soda tax rally with three of her charges.

Khadija Sabir of Lovie Lee's Stars of Tomorrow preschool in Philadelphia attends a soda tax rally with three of her charges. The proposed tax promises to pay for universal pre-K, parks and recreation centers. Emma Lee/WHYY hide caption

toggle caption Emma Lee/WHYY

Khadija Sabir of Lovie Lee's Stars of Tomorrow preschool in Philadelphia attends a soda tax rally with three of her charges. The proposed tax promises to pay for universal pre-K, parks and recreation centers.

Emma Lee/WHYY

Philadelphia's new mayor wants to do something few American cities have done: pass a tax on soda and other sugary drinks.

So far, Berkeley, Calif., has been the only U.S. city to approvesuch a tax. That measure was aimed atreducing soda consumption (and the negative health effects that go along with drinking too much of it).

But in Philly, the tax isn't being promoted as a scheme to bring down the city's high rates of obesity or diabetes. Mayor Jim Kenney says he wants to use the revenue for projects that benefit residents in a city with a 26 percent poverty rate, the highest of America's largest cities. He argues soda companies make big money and often market their products to low-income people.

"What we're looking to do is to take some of that profit, to put it back into the neighborhoods that have been their biggest customers, to improve the lives and opportunities for the people who live there," he said at a rally promoting the tax last month.

Kenney claims a tax of 3 cents per ounce of soda, iced-tea and other sugary drinks — levied on beverage distributors — would generate more than $400 million over the next five years. The money would help fund a plan for universal pre-K and community schools that offer services like health care, as well as major renovations to parks, recreation centers and libraries.

So far, no one is complaining about Kenney's intentions, but Daniel Grace, who heads up the local Teamsters Union, says there has to be a better way to raise money. The union represents about 2,000 people who work in bottling plants and drive delivery trucks.

His argument against the tax boils down to this: It would likely drive up the price of soda (just as the Berkeley tax has done), which, in turn, will reduce the consumption of sugary drinks. "When the demand goes down, they don't need as many [workers] as they have today," he says.

The Teamsters Union has printed hundreds of "No soda tax" buttons and T-shirts and has been handing out leaflets.

And right after Kenney proposed the measure, the American Beverage Association — a national trade group that previously shelled out more than $9 million fighting Berkeley's soda tax — launched a social media campaign against the Philadelphia proposal and started running ads on local radio stations calling it a "grocery tax on the kind of drinks we buy for our family."

But while the association's campaigns target Philadelphia residents, the fate of the soda tax ultimately lies in the hands of the city council, which will make its final decision in June. Council president Darrell Clarke has not taken a side yet, but he's concerned the burden would fall hardest on those Kenney is trying to help: the poor. "It doesn't take a whole lot of analysis to determine where those sugary drinks are being sold," he says. "So the question is, is that fair?"

The Rev. Adan Mairena, who is part of a group supporting the tax, estimates 80 percent of his congregation in North Philadelphia lives below the poverty line and admits that some of them are worried about paying more for these drinks. He's urging skeptics to take the long view.

"If we pass this, it's going to provide more opportunities in the long run and it's going to make us a better people, a better community," he says.

At a supermarket just a few miles away, Maribel Alago says she disagrees. She points out the city raised property taxes last year. Plus, there's a $2-per-pack tax on cigarettes to help the cash-strapped school district.

"People cannot barely afford anything nowadays," Alago says. "Now they going to tax soda, too."

Mayor Kenney says if the city council doesn't approve the tax, there's no other way to pay for expanded pre-K or revamped rec centers. Plan B is going without those things.

Chinese money is desperate to get out of China

Chinese money is desperate to get out of China

China is still growing at a healthy clip, China says.

But the slowdown continues, with the world’s second largest economy expanding 6.7% in the first quarter of 2016, compared to the same quarter of the prior year. That’s the slowest growth since the depths of the Great Recession back in 2009.

By the way, it’s completely within bounds to question the accuracy of the official Chinese data. After all, Chinese prime minister Li Keqiang said at an annual press conference in March that it would be “impossible” for the country of 1.4 billion people to miss its 6.5%-to-7% annual growth target.

What’s more, stimulus spending and a borrowing boom goosed China’s GDP numbers for the quarter, a situation that many economists see as unsustainable. The most dour indicator for the future of Chinese growth is the ongoing torrent of cash flooding out the country, suggesting that many Chinese see brighter opportunities abroad, whether they be in Vancouver real estate, US corporationsor off-shore tax havens.

Recently released data from the Institute of International Finance shows expected net outflows from China of roughly $530 billion in 2016, down a bit from the titanic $675 billion that zipped out last year.

That’s not just foreign money pulling out. IIF analysts forecast that the outflow of cash from China related to foreign investors will ease somewhat this year. “We expect a modest recovery in foreign inflows to China but continued substantial resident outflows,” they wrote.

If Chinese investors are voting with their feet, foreign investors would do well to take note.

Tiny Forage Fish At Bottom Of Marine Food Web Get New Protections

Tiny Forage Fish At Bottom Of Marine Food Web Get New Protections

Peruvian anchoveta being processed at a fish meal factory in Lima in 2009.

Peruvian anchoveta being processed at a fish meal factory in Lima in 2009. The small forage species has been heavily fished. Ernesto Benavides/AFP/Getty Images hide caption

toggle caption Ernesto Benavides/AFP/Getty Images

Peruvian anchoveta being processed at a fish meal factory in Lima in 2009. The small forage species has been heavily fished.

Ernesto Benavides/AFP/Getty Images

Sardines, herring and other small fish species are the foundation of the marine food web — they're essential food for birds, marine mammals and other fish. But globally, demand for these so-called forage species has exploded, with many going to feed the livestock and fish farming industries.

Some of these species are already heavily fished, and it will take time for them to recover. But other forage species have not yet been commercially targeted. And this week, the U.S. government passed measures — backed by environmentalists as well as fishermen — to protect these critical fish and invertebrate species in waters off the U.S. West Coast before they're overfished.

A rulepassed Monday by the National Marine Fisheries Service makes it illegal for commercial fishermen to develop new fisheries for hundreds of forage species unless scientists have first determined that targeting them will have no negative impacts on the marine ecosystem, existing fisheries and fishing communities.

Forage species include such creatures as lanternfishes, Pacific saury, silversides, eulachon, surf smelt and neon flying squid. Some of these species have hardly been fished at all. They may live in deep water far from shore and are relatively absent from public awareness.

"Just because people haven't heard of a lot of these species yet, it's really only a matter of time and economics before it becomes viable to put out huge nets that catch the entire base of our food web," Geoff Shester, California campaign director with the group Oceana, says in an interview.

Other forage fish species are already in trouble. Pacific sardines are at their lowest numbers in decades. Pacific herring have also declined. In the waters off Peru, the anchoveta has been heavily fished.

Shester says demand for forage species, which are potentially easy targets due to their tendency to gather in dense schools, is growing as aquaculture and livestock industries expand. A study published last year in Reviews in Fisheries Science & Aquaculture reported that aquaculture production doubled from 2000 to 2012, when about 55 million tons of fish and crustaceans were reared on farms. These animals rely heavily on fishmeal and oil, and in 2012, about 18 million tons of wild-caught seafood was rendered into these products, according to the report.

"The demand for fish oil and fishmeal is going through the roof," Shester says.

The new rule comes on the heels of two similar initiatives, both passed in 2009. One prohibits targeted commercial fishing for West Coast krill, an important marine food source for which fishing interest has rapidly grown in other parts of the ocean. Another law limits commercial fishing in parts of the Arctic Ocean as global warming melts sea ice and makes the region accessible to vessels.

Some forage fish species are already in trouble. Pacific sardines are at their lowest numbers in decades.

Some forage fish species are already in trouble. Pacific sardines are at their lowest numbers in decades. Gabriel Bouys/AFP/Getty Images hide caption

toggle caption Gabriel Bouys/AFP/Getty Images

Yvonne deReynier, senior resource management specialist with the National Marine Fisheries Service, says lanternfishes are one of the most ecologically important groups of fishes that will benefit from the new protections. Lanternfishes, also called myctophids, may be the most abundant vertebrate group on the planet in terms of biomass, or weight. According to a report by Oceana, the 246 species of myctophids in the ocean represent about two-thirds of the biomass, or weight, of all deep sea fishes.

But large natural abundance of lanternfishes and other forage species doesn't necessarily buffer them against overfishing.

"We don't know what the effects of fishing on these species could be in 50 years, but we aren't taking any chances," says Anna Weinstein, marine program director for Audubon California, one of the groups that supported the restrictions.

She says saury and neon flying squid have already become subjects of commercial fishing interest in other nations.

"So this action couldn't have come at a better time," Weinstein says.

The forage fish protections affect the band of water between 3 and 200 miles from shore off the coast of California, Oregon and Washington — an area covering about 280,000 square miles. Weinstein says the rule will have a wide array of trickle-down benefits for fishermen, marine mammals and seabirds. A great deal of conservation effort and money, she says, has already been focused on protecting islands where birds like albatrosses, puffins and shearwaters breed. Now, she says, their key food sources are protected, too.

Scientists around the world have endorsed the idea of protecting important forage species before they become exploited. A 2012 report from a group of 13 scientists called the Lenfest Forage Fish Task Force called for paying closer attention to the vulnerabilities of forage fishes and how overfishing these species can negatively impact many larger species that prey on them. According to the report, titled Little Fish, Big Impact , overfishing has contributed to the declines of the Peruvian anchoveta, Chesapeake Bay menhaden and other ecologically critical species. The authors call for setting lower catch limits for important forage species while boosting the minimum biomass that must be left in the water.

Oceana's Shester says the new policy is long overdue and that many overfishing crises, including the current collapse of the Pacific sardine, could have been avoided if fishery regulators had taken a more precautionary approach to management years ago.

"With Pacific sardines, the fishery's managers waited until numbers were at 10 percent," Shester says. "We saw warning signs that the fishery was collapsing five years ago, but only when it had collapsed did we do anything."

Protecting forage species now, he says, doesn't put them off-limits forever.

"It just means that we need to take a step back before we proceed and start catching them," Shester says. "It puts the burden of proof on the fishermen to show beforehand that they aren't going to harm the ecosystem if they catch these species, and only then can they put nets in the water."

Alastair Bland is a writer based in San Francisco who covers food, agriculture and the environment.

A quick rundown of everything we know (and often forget) about the economy

A quick rundown of everything we know (and often forget) about the economy

The financial crisis taught economists some hard lessons.

The financial crisis taught economists some hard lessons. But over the last 250 or so years economists have learned a few things that still hold up.


1. Markets aren’t perfect, but they’re the best we’ve got

Indulge me a useful over simplification: the goal of economics is to determine what’s the best way to allocate a scarce number of resources. Over-simplifying again, this can either be done by a central planner deciding who gets what, or letting the market decide by determining a price based on the scarcity of any good and how much people want it. A benevolent, all-knowing, all-powerful dictator may do the best job, but no such person exists. Markets do the second best job, even if they aren’t perfect. Prices are not always right because information is wrong or people make bad decisions. But a fallible market does a better job than a fallible human, which is why free markets grow faster for longer.

But because markets aren’t perfect there exists scope for policymakers to tweak markets and help them function better. Even the most ardent free-market economists agree the government has its place. But how much and how exactly is what divides the profession.


2. The key to sustainable growth is productivity

Economies need to grow, not every year, but most years. Economic growth represents societies getting richer. It keeps people happier, more productive, and affords debt repayment. Growth comes from putting more people or capital (machines, natural resources) to work. But you can only add so much of each and keep up high growth; people and capital also are in finite supply. The key to sustainable growth is productivity, or getting more output for each person, machine, or mineral.

Gains in productivity comes from inventing new products or making existing products better. Economists have been very worried about productivity lately because technology hasn’t delivered, productivity growth has mostly been slower sincethe 1970s compared to the post-war era and much slower compare to the first half o f the 20th century . It could be tech really has changed the economy and we don’t know how to measure productivity in the tech economy yet. Or it could be tech isn’t so great; the iPhone isn’t as revolutionaryas indoor plumbing. Economists are sharply dividedon this issue. We may all be dead before we know who’s right. It took almost a centuryfor the steam engine to transform the economy.


3. Most policies create winners and losers

Markets allocate goods and services between different parties. The division may not be equitable. A CEO earns $3 million a year compared to a fry cook at McDonald’s who makes $8 an hour. Forcing the CEO give some of his earnings to the fry-cook makes the fry-cook much better off and the CEO worse off (even if the benefits mean much more to fry-cook than the loss does to the CEO). Nearly all policies that tinker with markets, no matter how just they may seem, create distortions leaving winners and losers. Anyone who tells you different is selling you something.


4. People respond to incentives

When you give or take away income or wealth it alters behavior. The change may be too small to notice. If you increase someone’s taxes from 35% to 38% of their income, they’ll probably work the same amount. But if you increase their tax rate to 95% they’ll probably change their behavior. It’s hard to know where distortions start to matter and what will happen. A higher tax rate may mean you work less because you get less reward for your work. But you might also work more because you need more money. These effects are unpredictable and vary based on occupation, income, and geography. But these effects often determine who the winners and losers are and whether a policy is good for the economy.


5. Monetary policy can’t fix structural problems

We look to the Fed to fix the economy. Since the financial crisis, it has lowered interest rates, paid interest rates on reserves, and bought long-dated bonds. The hope was that lower interest rates would get people to invest, spend more, and boost hiring. It worked; unemployment is down to 4.9%. But the number of people workingstill hasn’t fully recovered.

Economists can’t decide it that’s because there’s more room to juice the economy with low rates or if the remaining slack is comes from some people lacking the skills employers want. If it’s the skill problem, low rates won’t get people back to work. The only thing that will help them is retraining or maybe new infrastructure projects. The distinction between demand and skills is important because, like all policies, low rates also create distortions,winners, and losers. Keeping rates low is only worth it if it will help employment.


6. The second moment is as important as the first

Economists often say if X happens, then Y will result. But that is not quite right. It is really: if X happens a range of Ys will result. There’s a lot of unpredictability about things we can’t control: a hurricane might occur, the Chinese economy might collapse, your house might burn down, future taxes might increase. Risk and uncertainty makes investors and consumers nervous and this can dampen economic activity. Government policy can reduce risk by offering a safety net with unemployment benefits and Social Security. But it can also create uncertainty about how different policies will play out (all those countervailing incentives) or how policies will change in the future.


7. Consumption doesn’t grow an economy, savings does

You often hear that keeping the American economy afloat depends on keeping American consumers spending. But this only works in the short run. People also need to save. Saving is what fuels investment, which makes the economy grow and stay productive (though we can borrow savings from abroad, at least for now). Saving also ensures households can continue to consume when bad things happen. Savings make consumption more predictable, which reduces risk for households, investors, and employers.

Sure, you can consume too little and hold back growth, which is arguably where China is—its household saving rate is between 20 and 30%. But America is far from that—its personal saving rate is just 5.5%. When we hear about an increase in consumption we should have mixed feelings about it.

Is Samoa's Obesity Epidemic A Harbinger For Other Developing Nations?

Is Samoa's Obesity Epidemic A Harbinger For Other Developing Nations?

A view of the lush Samoan vegetation in American Samoa, Tutuila Island.

LCDR Eric Johnson/National Oceanic and Atmospheric Administration hide caption

toggle caption LCDR Eric Johnson/National Oceanic and Atmospheric Administration

A view of the lush Samoan vegetation in American Samoa, Tutuila Island.

LCDR Eric Johnson/National Oceanic and Atmospheric Administration

The tiny Samoan islands have among the highest rates of obesity and Type 2 diabetes in the world — and diet and weight-related health issues have been rising in these Pacific nations since the 1970s. Now 1 in 3 residents of American Samoa suffers from diabetes.

Of course, the Samoan islands aren't the only countries coping with increasing rates of obesity and diabetes. A pair of studiespublished this month in The Lancet found that rates of diabetes all over the world have gone up by 4 percent since 1980. While about 100 million people around the world had diabetes in 1980, that number quadrupled by 2014.

In the Samoan islands, these trends have been especially pronounced. The average Samoan's weight has shot up — and health declined — so steeply that these islands have caught the attention of epidemiologists around the world.

Why?

Some researchers have speculated that genetics are a factor. But Stephen McGarvey, a co-author of the two Lancet papers and an epidemiologist at Brown University who has spent more than two decades working in the region, says what happened in the Samoas isn't so different from what's happening all over the world.

Unhealthy, imported foods flooded supermarkets and Samoans developed a taste for cheap fast food. And as these countries' economies modernized, more and more Samoans started working desk jobs. Cars and buses replaced walking.

Because the Samoas are so tiny, these economic and cultural changes took hold especially quickly. "What's happening there is really a harbinger for other parts of the world," McGarvey says.

We asked McGarvey to tell us a bit more about what's happening in the Samoas, and the lessons these islands can teach the rest of the wold.

The interview has been edited for length and clarity.


Interview Highlights

How has Samoan diet changed over the past 30 years?

Samoans used to — and still do — grow their own food. Their traditional diet consisted of mostly taro, breadfruit, coconut, bananas and seafood — very healthy stuff.

But more recently, on top of those foods, people started buying foods that were coming from the outside. And these foods tended to be lower-quality foods — they're cheaper and more calorific.

A large amount of frozen poultry started coming in from the North American and U.S. industries. At the same time, imported vegetable oil became more commonly and cheaply available. So there was this rise in the number of family-run establishments where you can buy some cheap fried chicken.

And [ cheap, really fattycuts of] frozen lamb started coming in from New Zealand. [Other fatty offcuts, like turkey tails, also flooded in. It was more meat than Samoans were used to consuming.]

We hear about the same sort of thing happening in countries like India and Brazil, where economic changes and global trade have brought in unhealthy food.

Absolutely.

These changes happened in the Samoas relatively quickly and penetrated rather rapidly because of their small population.

In a large place like India or Brazil, it takes a much longer time for people to be exposed to this new nutritional environment that results from globalization. And mind you, in many of these developing nations where obesity and Type 2 diabetes is becoming more of a problem, they are also still dealing with infectious diseases, maternal mortality. In some countries, while obesity is a problem in the richer, urban areas, undernourishment and malnourishment are problems among poorer, rural populations.

It's a much more complicated picture.

Are there any lessons that other countries can learn from Samoa?

Samoans, and the Samoan governments, now know that they've got a problem and they're working to fix it.

I think these countries where the obesity isn't as severe as it is in Samoa — yet — need to start recognizing that they still have a problem and start taking proactive steps to address it.

There has to be proper nutrition education in schools for children, but adults need to be educated about proper diet and exercise habits as well. And politicians need to get educated, so they can make smart policies around this health issue.

What are Samoans doing to address the problem?

They're still in the infancy of developing interventions that are well done from a scientific perspective. But they have tried a few things.

Mostly the authorities are thinking of how they can promote local agricultural production of South Pacific vegetables and fruits, and encourage more people to buy and them.

Any changes will take a while — it's just hard.

Poor people, people who are busy trying to feed everyone in their family and making ends meet, will be drawn to foods that are cheaper and are faster to buy or prepare.

This will be the world’s fastest-growing economy this year, says the IMF

This will be the world’s fastest-growing economy this year, says the IMF

It will take decades for Myanmar to undo some of the economic damage inflicted by the military regime that ruled the country for more than 50 years.

But after the country installed its first civilian government in decades in March, the healing is under way. In the latest World Economic Outlook , the International Monetary Fund forecasts Myanmar’s economy will grow by 8.6% in 2016, the fastest pace among the nearly 200 countries for which the organization provided forecasts.

The country’s agriculture sector has tremendous potential—Burma was once the world’s largest rice exporter—and its workforce could staff the kinds of factories that are driving the growth of textiles and footwear in Vietnam.

Still, there’s a long way to go. With per capita GDP of a bit below $1,300 in 2015, Myanmar remains one of the of the world’s poorest countries. Its per capita GDP is wedged between Bangladesh and Yemen.

Burma’s road will be long and hard. The world should wish the country luck.

Pop Culture Happy Hour: 'Hamilton'

Pop Culture Happy Hour: 'Hamilton'

Marquis de Lafayette (Daveed Diggs), Hercules Mulligan (Okieriete Onaodowan), John Laurens (Anthony Ramos), and Alexander Hamilton (Lin-Manuel Miranda) in the acclaimed Broadway musical Hamilton .

Joan Marcus/Sam Rudy Media Relations hide caption

toggle caption Joan Marcus/Sam Rudy Media Relations

Marquis de Lafayette (Daveed Diggs), Hercules Mulligan (Okieriete Onaodowan), John Laurens (Anthony Ramos), and Alexander Hamilton (Lin-Manuel Miranda) in the acclaimed Broadway musical Hamilton .

Joan Marcus/Sam Rudy Media Relations

Sometimes, it takes a while to bring a show into being, but we feel like this one was worth the wait. This is the week we get real super nerdy about music, theater, enthusiasm, hashtags, dancing, just ... lots of everything.

Last fall, when our treasured regular panelist Gene Demby started listening to the Hamilton cast album after it showed up over at NPR Music as a First Listen, he started saying things like this.

@PhenomenaLi__ yeah. at the risk of being too effusive, i sort of get why musical people like musicals if this is a feeling they get often.

— Gene Demby (@GeeDee215) September 30, 2015

And at some point, we decided we needed to go to Hamilton , and we needed to go with Gene. And months and months later, in the first week of March, we made it happen. This is the week we finally get to bring you the conversations I've been trying to bring you for almost six months. Hooray!

The first segment is about the show itself: we talk about influences both inside and outside the world of Broadway, we play some Sondheim and some Cole Porter, we talk about jazz hands and Bugs Bunny, and we break the news to you that yes, this particularly heavily hyped thing is just as good as the hype suggests it is. Here's the listof references I talk about one point (there are many, many other similar pieces around), and here's the episodeof Another Round that Gene references.

The second segment is about the show as a phenomenon and what it's doing to all of us. We talk about the tremendous social-media meme-ing of it, and how we feel about the overload that many of us have felt and are feeling, and Gene takes a moment to ponder what might have happened if he'd obeyed a different instinct than the one he did.

A couple of things you should know: I'm so sorry we didn't have at the tip of our tongues the name of Alysha Deslorieux, the fantastic performer we saw as Angelica. We were falling all over ourselves to talk about how great she was and didn't pause to Google her. I apologize; she was tremendous. That's what we meant to get across. See also: Javier Munoz, whom we referred to (he generally does Alexander Hamilton one performance a week) but didn't name. (And best thoughts, sir.)

And also: even more than usual, we owe this show to our fabulous producer, Jessica Reedy, who is responsible for most of the interplay between the conversation and the music posts, and who also was the one who wrangled the tickets. So this is very much Jessica's baby, even though you won't hear her voice.

And also also: Thanks to Stephen for hosting. I promise, I don't sound so creaky anymore. Maybe 5 percent creaky. But almost not creaky at all!

I want to say a couple things about Hamilton . The tickets are both largely unavailable and very expensive even if you can get them, which (and Miranda talks about this on Another Round, too) is a really hard thing to change about live theater. They're small shows, really, and they only happen so often, and if demand gets high enough ... well. It's a tough thing to entirely undo. Because I knew we were going, I didn't listen to the cast album before we went, but honestly, most people aren't going to see this cast in this show in this theater before they break up and new casts and tours and other things happen.

It's really important to recognize, I think, that this is not a series of concerts, where the live performances — these specific ones — are the only thing. Hamilton is a feat of authorship, just like Company or The Pirates Of Penzance or South Pacific or Rent or Anything Goes or whatever, and it's going to exist in a zillion forms. It's going to be performed and revived and re-revived and done in schools and done locally, and it's going to be done well and done badly, and individual songs will be covered on people's albums, and there will probably be a movie someday, which lots of people will hate. There will be disputes over who can play Hamilton, who can play Burr, who can play Angelica.

There will be intense conversations related to particular productions about rap experience and theater experience, many of which will carry problematic and gross undertones and teach people things and make them fight, and this show is going to keep vexing and challenging a certain subsection of theater people in this wonderful way. There will be boys (and girls too, but I'm going to guess especially boys) who have never done theater or even thought about doing theater who suddenly want to do it because of this, and one of them will write a show in 20 years that will draw its own crowds. God willing, Old Man Miranda is going to get his Kennedy Center Honors and his EGOT (that's actually probably going to be, like, soonish) and his next show will put him and everybody else in the position of realizing it cannot be this again because nothing by anybody can be, quite, this again.

It's not just this thing , like a production you go stare at and go home or else press your nose up against the glass wishing you could get into. It's a really important piece of writing , and it's going to be around a lot longer than these crazy lines and lotteries and YouTube videos and memes and hashtags. It's a piece of theater by an enormously important American composer, and it's out in the world, and I promise, if you're open to it, it will get to you as a composition, whether or not it gets to you as a hot-ticket Broadway show.

We close, as always, with what's making us happy this week. I'm happy about a clip from late-nightthat you might enjoy if this week's theater theme was up your alley. Glen is happy about a couple of events he's got celebrating the release of his new book The Caped Crusade: Batman And The Rise Of Nerd Culture yaaaaaaay which you can find out more about by following himon Twitter. (March 22 in Brooklyn with Alexander Chee! March 29 with me in D.C.!) He's also happy about the meetup we recently had where he got oodles of podcast recommendations, including one he wants to sharewith you. Gene is happy about the return of a favorite show and an oral historythat hit home(town) for him. Stephen, who is as I write this finding Austin exhausting, is happy about a winner. As he should be.

Find us on Facebookor follow us on Twitter: me, Stephen, Glen, Gene, producer Jessica, and producer emeritus Mike.

The one chart that explains almost everything

The one chart that explains almost everything

If you want to understand the state of the economic and financial world right now, this is the best chart to have.

This is what it helps explain: slowing global growth(The emerging market investment boom is kaput.); the weakening Chinese economy and currency(Cash is pouring out the middle kingdom.); the relatively strong dollarand the weakness of US exports; the movement of real estate in Vancouver, Sydneyand London; the Chinese corporate foreign acquisition spree; the sharp collapse of iron prices; the surging prices of gold; and, on and on and on.

Numbers released from Institute for International FinanceFriday show net capital outflows from emerging markets hit roughly $755 billion in 2015, including the group’s best guess for so called “unrecorded outflows.”

That follows the more than $175 billion in outflows registered in 2014. Moreover, IIF’s new forecast calls for at least another $500 billion in outflows in 2016.

What are “unrecorded outflows”? Many emerging markets such as China closely control the flow of the money in and out of their economies. That leads investors who want to get their cash out of those countries to turn to, say, unconventional methods that often aren’t registered in official accounts.

The upshot? After nearly a quarter century of massive inflows of capital into emerging markets—mostly China—that money is washing out, mostly from China. The IIF expects net outflows from China of roughly $530 billion in 2016, down a bit from the titanic $675 billion that zipped out last year. If you want a longer version of the story, read this.

The one chart that explains almost everything

The one chart that explains almost everything

If you want to understand the state of the economic and financial world right now, this is the best chart to have.

This is what it helps explain: slowing global growth(The emerging market investment boom is kaput.); the weakening Chinese economy and currency(Cash is pouring out the middle kingdom.); the relatively strong dollarand the weakness of US exports; the movement of real estate in Vancouver, Sydneyand London; the Chinese corporate foreign acquisition spree; the sharp collapse of iron prices; the surging prices of gold; and, on and on and on.

Numbers released from Institute for International FinanceFriday show net capital outflows from emerging markets hit roughly $755 billion in 2015, including the group’s best guess for so called “unrecorded outflows.”

That follows the more than $175 billion in outflows registered in 2014. Moreover, IIF’s new forecast calls for at least another $500 billion in outflows in 2016.

What are “unrecorded outflows”? Many emerging markets such as China closely control the flow of the money in and out of their economies. That leads investors who want to get their cash out of those countries to turn to, say, unconventional methods that often aren’t registered in official accounts.

The upshot? After nearly a quarter century of massive inflows of capital into emerging markets—mostly China—that money is washing out, mostly from China. The IIF expects net outflows from China of roughly $530 billion in 2016, down a bit from the titanic $675 billion that zipped out last year. If you want a longer version of the story, read this.

All-Natural But Still 'Imitation'? The Strange Case Of The Skim Milk Label

All-Natural But Still 'Imitation'? The Strange Case Of The Skim Milk Label

Mary Lou Wesselhoeft is a dairy farmer in the Florida Panhandle.

Mary Lou Wesselhoeft is a dairy farmer in the Florida Panhandle. Her Ocheesee Creamery pasteurized skim milk has nothing added — and that's the problem. According to regulations, without added vitamins, it can only be sold as "imitation skim milk." Courtesy of Institute for Justice hide caption

toggle caption Courtesy of Institute for Justice

Mary Lou Wesselhoeft is a dairy farmer in the Florida Panhandle. Her Ocheesee Creamery pasteurized skim milk has nothing added — and that's the problem. According to regulations, without added vitamins, it can only be sold as "imitation skim milk."

Courtesy of Institute for Justice

For three years, Mary Lou Wesselhoeft, a 61-year-old Florida Panhandle dairy farmer, had been selling milk at nearby farmers markets and health food stores in an effort to keep her dairy farm afloat. The last thing she was trying to do was to dupe customers who went out of their way to score a cold bottle of her Ocheesee Creamerypasteurized skim milk.

But Florida authorities saw it differently.

Because Wesselhoeft doesn't add vitamins back in once the fat is removed, officials say her skim milk is considered an "imitation milk product" and in 2012 insisted that she begin labeling it "Non-Grade 'A' Milk Product, Natural Milk Vitamins Removed" — wording Wesselhoeft is dead set against adding.

"They want it to be called imitation milk, but it isn't," she says. "We just want to be able to tell the truth about our milk. We never claimed there was vitamin A in there," Wesselhoeft says.

She's still skimming her milk — the fat and vitamins that go with it are used to make butter, ice cream and whole milk products she sells. But, with the exception of a small amount that she is allowed to use in yogurt, she's been forced to dump hundreds of gallons of her skim milk ever since. Unfortunately, it looks like the dumping will have to continue.*

Last week, a federal judge ruled that state officials are perfectly within their rights to require added vitamins as part of nutritional standards for milk. Indeed, the Food, Drug & Cosmetic Act, implemented by the FDA, has developed standards of identity for hundreds of foods besides skim milk. For example, that's why jars labeled "jam" are made from whole fruit, while "jelly" is made from fruit juice.

As we're seeing in the ongoing fight over GMO labeling, or in arguments being made against marketing terms like " all natural," there's a lot riding on the precise words companies use to sell Americans food.

For Wesselhoeft and her attorney, Justin Pearson at the Institute for Justice, a libertarian public interest law firm, the fight over Ocheesee Creamery's skim milk isn't just a labeling issue. They're framing it as First Amendment challengeand are now planning to appeal last week's ruling.

"Nowhere in the Constitution does it give the government the right to dictate what Americans can buy or eat. That's why this is a First Amendment argument. No governor or president has the authority to say you cannot buy milk without vitamins," says Wesselhoeft.

Bottles of pasteurized milk from the Ocheesee Creamery

Bottles of pasteurized milk from the Ocheesee Creamery Courtesy of Institute for Justice hide caption

toggle caption Courtesy of Institute for Justice

Part of the heel-digging stems from the dairy being allowed to sell its skim milk for several years without challenge.

"They were selling the milk for three years with the state's knowledge and the state inspecting it every month," says Pearson. "Then, out of the blue, after three years with no complaints or confusion, the state realized it didn't meet the definition of skim milk and told Mary Lou she would have to inject vitamin A into the skim milk or call it something else."

Wesselhoeft says it was a new commissioner and a change in dairy inspectors that prompted the state's actions. Officials from the Florida Department of Agriculture did not answer questions on staffing changes, saying only, "We are pleased with the judge's ruling, as this case has always been about ensuring that consumers are aware of the nutritional value of the products they purchase and feed to their families."

Pearson says Wesselhoeft tried to resolve the issue, approaching officials with a number of labeling alternatives for her skim milk. All were denied.

"They said she could change the label as long as she doesn't call it skim. ... Mary Lou would have to call it imitation skim milk. It violates her principles," he says.

Susan Schneider, director of the postgraduate degree program in agricultural and food law at the University of Arkansas, says the judge's ruling was correct. Under federal and Florida state law, skim milk must have the nutrients added back in, or it runs contrary to long-established milk labeling laws, industry practices, and consumer expectations.

"It cannot be nutritionally inferior and still be called milk," Schneider told us via email. "Here the dairy wishes to sell a product with the nutrients stripped out, promoting it as a natural product to consumers who have always assumed that skim milk had all the same nutrients, without the fat."

In some ways, the case has parallels to claims that Hampton Creek's Just Mayo was misleading consumersbecause it was made without eggs. Pearson notes that those charges were led by the egg industry, which saw Just Mayo as a threat. But in this case, he says, none of Wesselhoeft's customers complained that her skim milk lacked the vitamins found in Ocheesee's whole milk products. Schneider says the difference is that Hampton Creek didn't try to challenge the requirement that its product be nutritionally equivalent.

"We are now only beginning to appreciate the links between diet and health. There are compelling arguments to protect the nutritional integrity of the foods we eat," she says. "If a manufacturer takes nutrients out of food through processing and still wants to use the common name of the food, the nutrients have to go back in so that the nutritional value of the food is preserved."

Her advice for milk drinkers?

"If you drink milk and are seeking natural 'real food', just drink whole milk, organic preferred."

After all, in recent years research has suggestedthat whole milk may actually be better for waistlines anyway.

* Wesselhoeft's lawyer says his client can't donate her skim milk to food pantries or shelters — she'd have to get the label approved first.

Clare Leschin-Hoar is a journalist based in San Diego who covers food policy and sustainability issues.

Child Migrants' Harrowing Journey Brought To Life On Stage

Child Migrants' Harrowing Journey Brought To Life On Stage

Shelter actors (left to right) Emilio Garcia Sanchez, Peter Mark, Jonathan Bangs, Cynthia Callejas, Jazmen-Bleu Gutierrez, Andres Velez and Moriah Martel.

Steven Gunther hide caption

toggle caption Steven Gunther

Shelter actors (left to right) Emilio Garcia Sanchez, Peter Mark, Jonathan Bangs, Cynthia Callejas, Jazmen-Bleu Gutierrez, Andres Velez and Moriah Martel.

Steven Gunther

Many of the kids who left Central America for the U.S. two years ago are still waiting to see if they'll be granted asylum. Tens of thousands came on foot, escaping gang violence, hoping if they got here they would get to stay.

The ones who made the journey without their parents have been called unaccompanied minors, child migrants or asylum seekers. A new play, Shelter, gives them names and tells their stories.

In one of the scenes — or chapters, as they're called in the play — Mariana, Sandra and Eloisa are bunking together in a government funded shelter somewhere in the U.S. They just met. Sandra is from El Salvador, Mariana from Honduras and Eloisa from Guatemala. They can't sleep, so they're exchanging horror stories about their journeys and what it was like back home.

Eloisa tells the other girls about the violence that drove her from her town. "One day, our mayor found a head — a human head — at his doorstep," she says. "That was it, my mother packed our things the next day." Sandra replies, "I've seen worse than that."

Actor Moriah Martel, who plays Eloisa, says that after a year of research and preparation, getting into character is still really challenging.

"Falling off trains in the middle of the night, losing arms, or having a severed head on the doorstep or making it to the border and being sent right back," she says, listing all the things that so many of these kids have endured. "There are so many aspects of it that feel larger than life."

Marissa Chibas wrote Shelter based on interviews with academics studying the Central American child migrant crisis and kids who made the dangerous trek. Marissa Chibas hide caption

toggle caption Marissa Chibas

Marissa Chibas wrote Shelter based on interviews with academics studying the Central American child migrant crisis and kids who made the dangerous trek.

Marissa Chibas

Martel is an undergraduate student at California's Institute of the Arts — CalArts — where the play was created. It's the brainchild of Marissa Chibas who founded Duende CalArts to create bilingual, bicultural theater in collaboration with Latino and Latin American artists.

Chibas says she saw blog posts about the surge of unaccompanied minors even before the mainstream media latched onto the story, and felt compelled to tell it from the kids' perspectives. She visited a shelter in San Diego and talked with the volunteers and kids there. Choking back tears, she says she couldn't help imagining her own 12 year-old in their shoes. "Oh my god, this could be my son," she recalls. "What kind of desperation would I have to be in that I would have to send my son on this dangerous journey?"

Chibas also interviewed teens who made the dangerous journey and are now attending high school in Los Angeles at the School of History and Dramatic Arts. She invited some of those students to workshop the play so that actors, like Martel, could meet the real people these "larger than life" things were happening to.

Jasmin, from El Salvador, was one of those people and Chibas used a lot of her story as inspiration for Shelter. (Jasmin's last name is being withheld for her safety.) She's waiting to see if she'll be granted asylum and if not, she'll be sent back to face the tormentors she left back home.

Jasmin says she came to the U.S. because a girl in school kept harassing her to join a gang. When she refused, the girl threatened to kill her, and those aren't empty threats in El Salvador. Kids who refuse gang initiation are retaliated against and can end up in "black bags" as Jasmin puts it. So, her mom found a group leaving for the U.S. and made her go with them.

Jasmin, 14 years old, chubby-cheeked and barely 5 feet tall, took her first trip outside El Salvador — not on the eight-hour flight with the stop in Mexico City and beverage service, but on foot, in strangers' cars, clinging to the top of freight trains.

She says they traveled at night, mostly, and slept during the day on dirty floors and in holes in the ground. The total cost: $8,000. Her mom borrowed the money to pay multiple smugglers along the way. The amount of time it took her to get to the U.S.-Mexico border: one month and two days. Then she spent 100 more days in immigration detention because Jasmin turned herself in to the U.S. border patrol.

She says the absolute worst part of the entire journey, though, was riding "La Bestia."That's the freight train that many migrants ride to cross Mexico, where the mafia, random thugs and even tree limbs can kill you.

A read-through of the play for clients of CARECEN, a resource center for Central American immigrants. Rafael Hernandez hide caption

toggle caption Rafael Hernandez

A read-through of the play for clients of CARECEN, a resource center for Central American immigrants.

Rafael Hernandez

The train plays a huge role in Shelter . In multiple scenes, actors are arranged in horizontal or vertical lines on stage, to simulate a train. Sometimes it's because the action is happening on a train. But not always.

The actors often stand in lines facing the audience, methodically listing every step of bureaucracy the kids must go through when they reach the U.S.- all to the rhythm of a freight train on a track: "Step 3!" they recite in unison.

"If not Mexican anyone appearing to be a child will receive mandated TVPRA- Trafficking Victims Protection Reauthorization Act scanning."

Shelter has four chapters. By play's end, the audience get's a to know some of the historical context that lead to this crisis, the immigration bureaucracy the kids go through if they make it to the U.S., the current debate over what to do with these kids, and their individual stories. There are also sweet moments of kids being kids: playing soccer, sharing their dreams for the future.

The play opens this weekend at a park in a predominantly Latino neighborhood in Los Angeles. Chibas says she wanted to share it, first, with the community closest to the story. She hopes it shows not only the kids trauma, but their courage and resilience. "They have high hopes, they have big dreams and I want to support those dreams in anyway that I can," she says.

Jasmin says she's conflicted about living in the U.S. without her mom and her two younger sisters and brothers. She told me she's in love with this country, but her dream is that things back in El Salvador get fixed. Her sisters are coming of age, and Jasmin is worried they'll be targeted by gang members one day and told 'You have to join, because if not, we'll hurt you.' She doesn't want them to have to make the choice she was forced to make: Stay and die or leave and live...if you're lucky.

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